New Mortgage Rules and their Impact on Calgary Real Estate
The Calgary real estate market has decelerated as compared to the report of the previous year. There are five major things which can explain this decline in the real estate housing market of Calgary and they are as follows:
No. 5: The real estate market generally slows during the summer time.
No. 4: The number of first-time home buyer purchasers have lessened from the previous year.
No 3: The slowdown of economical growth.
No 2: Negative and harmful immigration to the province last year.
No 1: Lots of confusing statements in new mortgage rules.
In the first quarter of 2009, the overnight charge was decreased to 0.25 percentages with an indication that it is likely to increase from 1st of July this year. The first time property purchasers took support from the housing statistics and real estate information revealed by CREB®. According to the month end report of July, about 28 percent of single family houses were sold with an average of below $350,000. This statistics is 35% down from the 2009's average. About 62 percent of condominium houses sold for below $300,000 this year.
Last year Calgary condo sales statistics were 71%. The regional manager of national mortgage broker Invis, Mr. Gary Seigle says that the new mortgage rule has played a vital role in real estate business in the entire region. The mortgage rules are quite confusing for investors. He added that the real estate market peaked during the month of March and the mortgage rules came into effect from April 19th this year. Many doubts have arisen for the general public. For example home buyers may think that they should pay a 20% down payment for all real estate property, but it is actually applicable only for those property which will be rented out at all times.
You can still buy your property with 5 percent down payment, but the qualifying requirements have changed. Mr. Seigle points out that people are not clear with the qualifying rates. When the mortgage term is below five years, people should use five-year preset posted mortgage rate. If the term is 5 years, the buyer can qualify at the best available rate. The main banks of Canada including RBC, TD Bank and Scotia bank began lowering mortgage rates.